A Helpful Guide for Those of You Considering Forex Trading in Indonesia
Much like many other emerging countries, Forex trading has taken off in a big way in Indonesia. However, as with many other newcomers to the industry, Indonesia is still developing its own regulatory system. We had great difficulty finding out about the latest rules and regulations, so don’t be disappointed if you found yourself in a similar position. We have to admit that uncovering whether Forex trading is considered legal was not the easiest of tasks. We did, however, find a recent news article that is definitely worth reading, especially if you are concerned about the legality of FX trading in relation to Sharia law.
Indonesia, more correctly known as the Republic of Indonesia, lies between the Indian and Pacific Oceans, and is one of the largest island countries in the world. Located in Southeast Asia it is currently the fourth most populated country, with in excess of 258 million residents. Indonesia has been an important region for trade since the 7th century and is still important today.
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For many ordinary people, Forex trading has become a very popular form of investment. And with the improved economy and increased wealth, it is also becoming increasingly popular in Indonesia. To start with it was touted as a get rich quick product, but investors are becoming much more savvy and realising there is money to be made, but success depends on being a smart investor. In the beginning, there was some confusion over whether Forex trading was actually legal. It appears that it is but as this is an emerging form of investment, the rules and regulations are constantly changing. Don’t worry though, because the internet is a wonderful thing. As well as the helpful tips and guidance we plan on providing, there are various other Forex sites you can use to keep yourself informed.
There are likely going to be a few of you visiting this page that are new to forex trading, so let’s start with a brief introduction.
Welcome to the world of Forex trading
Forex refers to the trading of foreign currencies and is becoming one of the most interesting markets you can invest in. There is no centralized market, but it is currently the largest financial market today. Open 24 hours a day, Monday to Friday, there are more than $3.5 trillion trades made every day. Which makes it three times bigger than all the US financial markets combined. There is no end to the different types of people who are able to participate, from governments and large institutions, to businesses and ordinary people. After all, in today’s global economy we all need to have access to foreign currency in order to buy and sell goods and services. There has long been a market for currency exchange and it is set to continue for many years to come.
Foreign currency trading was initially conducted by large financial corporations, brokers and governments, but today it is possible for almost anyone to participate. Although, we have to say, there are still a number of locations where it is frowned on, and currency prices are still on the whole influenced by the largest participants in the market that are based in major financial centers such as London and new York.
Forex brokers in Indonesia – Are they legal?
Many of you will be wondering whether it is legal to trade Forex in Indonesia. After all, we’ve already mentioned that in some locations it is frowned upon. You’ll be pleased to know there are a number of Indonesia Forex brokers, and it is perfectly legal for them to offer such services to the general public. However, Indonesia has a largely Muslim population, so there are certain religious factors that may influence the decision as to whether you should trade. Once you’ve come to a decision you’re going to be faced with the task of finding the best Indonesian Forex brokers to trade with.
Much like certain other forms of investment, Forex trading can be a risky endeavor, and is going to require a level of knowledge, experience and emotional control. You aren’t going to be able to start trading straight away, and risk huge amounts of money. Jumping in too quickly will only leave you with regrets, and a bank balance looking severely depleted. As we’ve already said you are now going to need to find a top Forex broker in Indonesia to work with and it’s not going to be the easiest of tasks. Any Indonesian Forex broker you choose is going to act as your partner, so you need to be able to trust them absolutely. You also need to feel comfortable working with them, and be certain the service that is offered meets your needs and requirements. It will also be an advantage if there is a wealth of educational material available, because you’re always going to need to advance your skills and knowledge. And it will be good if there is a chance to practise what you’ve learn and decide whether Forex trading is the right form of investment with the help of a demo account.
Forex trading conditions in Indonesia are pretty good. This particular form of investment is expanding and becoming increasingly popular across the globe. And Indonesia looks set to become one of the leading markets in the world. This has happened because in the initial stages there were very few rules and regulations, and hardly any government red tape to hinder its development. It has still not reached the heights as in other countries of Europe and Australia, but the local government are very keen on pushing out foreign competition and allowing more home-grown firms to become established.
There are a number of other reasons Forex trading has been able to gain such a foothold. The country’s economy and government rely heavily on the FX market for a big percentage of its funding. Indonesia is also able to provide the perfect conditions for trading foreign currencies, as it uses a floating foreign exchange system and has a free market economy.
Who regulates Indonesian Forex brokers?
For any new FX traders in Indonesia it’s important to understand who sets the rules, and who makes sure the top Forex brokers in Indonesia are following them. The currency used in Indonesia is the Rupiah, and its exchange rate is the responsibility of the Bank of Indonesia. The Bank is also responsible for regulating FX brokers who operate in the country. It regulates and monitors Indonesian Forex brokers as well as offshore brokers who operate within the country or who have a local base of operations. Strict terms and conditions are imposed as well as clearly defined rules that have to be followed. Any broker found not meeting the requirements or breaking the rules is liable to receive a hefty fine. Another important factor for any broker looking to set up business in Indonesia are the high taxes and strict regulations.
Let’s see if we can give you some help with finding the best Indonesian Forex brokers.
Top tips for finding a top Forex broker in Indonesia
The best way to start your Forex trading experience is to find the right partner to provide the necessary services. There are a number of different brokers, some of which will be local Indonesian Forex brokers, while others will be offshore brokerage firms with offices in the country. Whichever one you choose there are a number of ways you can increase your chances of finding the best one. We can’t really give you a short list of name, because you are all going to have your own individual preference, needs and requirements. Which means you are first going to need to dig deep into your psyche and decide what you’re looking for and what you might like to see in a broker’s online site. Once you’ve made a few decisions in this regard you can start to look for the best FX broker. And where are you going to look? Keep reading and we’ll give you a few suggestions.
Read some Forex broker reviews
We’ll be writing some of our own Forex broker reviews and of course we’d suggest you first read a few of them. But there are also a number of other review sites you can use for information. In general there will be sections of the review that cover payments, trading platforms, tradeable instruments, customer service, trading tools and Forex bonuses. The best review sites give you the good and the bad of a wide selection of brokers, as well as sharing lots of trading tips. It will also advise you of the license and regulatory body a broker is monitored by, along with any restrictions the broker can impose. For example, a number of brokers are forced to place restrictions on residents of certain countries.
Do your own research
As well as reading our impressions of different Forex brokers you also have the choice of undertaking your own research. It’s not a task that can be done in five minutes. In fact, it’s likely to take considerably longer. However, the more effort you put in and time you spend looking at all the angles, the more likely you’re going to find the best broker to work with. As well as visiting individual Forex broker websites you might want to sign up with a few forex trading forums, as these can be great places to learn from other traders, what is good and bad in the Forex world. You might find there are a number of brokers that get mentioned time and time again. If the word is good then you can add them to your list of possible contenders.
Trying ‘Googling’ it
If all else fails there is always an online search to fall back on, but be prepared for thousands of hits. Type ‘best Indonesia Forex brokers’ or ‘top Forex brokers Indonesia’ into the search bar and you’ll get a list so long that you’ll never find the time to click on all the links. Concentrate on the first few pages, and remember that those at the top and the bottom of each page are usually paid ads and you might want to avoid them.
Once you’ve got a few names you should take the opportunity to try them out by opening a demo account, before you risk real money. It’ll also give you a chance to test your strategies, find your way around the trading platform and discover whether you enjoy Forex trading.